Protecting Your Business in Times of Crisis
Scott D. Clary | Mental Models, Performance, Business & Entrepreneurship
Here is my weekly email with some insights and ideas pulled from conversations I had on my podcast as well as some other tools and resources you may find useful.
😟 Protecting Your Business in Times of Crisis
The past few years have seen us through perhaps some of the worst times for business owners. If you've been victim to the economic recession and drop in demand caused by COVID-19, know that the struggles you've faced are not a result of your poor planning or faulty decision-making.
In reality, no one could have predicted the pandemic and its far-reaching effects.
The reason I bring this up is that in today's Success Story recap, we're going to touch on the themes of running a business mid-crisis. I know this can be sensitive for those who still feel the effects of the pandemic, so if you're triggered by the content in any way, please brush past this one; we've got plenty of other topics to come.
That being said, I'm excited to talk about one of my recent Success Story guests – Vincenzo Guzzo. Perhaps one of the most prosperous businessmen and entrepreneurs of the past few decades, Guzzo has successfully launched businesses in cinema, real estate, medicine, and hospitality.
(He's also been a Dragon in CBC's Dragons' Den. It doesn't get much more successful than that, does it?)
In a time when many business owners are struggling, Guzzo has been able to not only maintain his businesses but also thrive. So what is his secret? How does he continue to develop his businesses in times of crisis and upheaval?
I'm eager to share the advice and insights of a man who knows how to make it through tough times, and I'm sure you'll find his advice just as valuable. Let's dive right in.
The Success of Vincenzo Guzzo
We're not going to recap the entire Success Story episode – you can watch the full interview here – but I do want to briefly summarize Vincenzo's business journey.
Guzzo is a man who knows how to spot opportunity and seize it with both hands. His first business move was to join his father's cinema business, Cinémas Guzzo, which he later developed into one of the largest and most successful private cinema chains in Canada and the United States.
This was the focus of much of his career, and to this day, Guzzo is still developing his cinema chain by introducing new locations and entertainment experiences.
Alongside Cinémas Guzzo, Vincenzo's career also saw him create a number of other successful businesses: Groupe Guzzo Construction Inc., Guzzo Hospitality, and Guzzo Medical Services Inc.
Some impressive success indicators to note:
- Vincenzo was a Dragon on the 13th season of CBC's Dragons' Den, where the board of Dragons was a carefully selected team of highly successful and influential businesspeople.
- In 2012, he was a recipient of the Queen Elizabeth II Diamond Jubilee Medal.
- He was also knighted by the Order of Merit of the Italian Republic, and continues to be recognized for his achievements in business and entrepreneurship.
In my interview with Guzzo, I learned of perhaps his biggest success in recent years: managing to not only keep his businesses afloat, but also make them thrive, during some of the most tumultuous times in recent history.
Guzzo's take on crises-proofing and dealing with the unexpected
Though no one could have prepared us for the devastation of the pandemic, change and disruption are inevitable facts of business. It's important to prepare for the worst and hope for the best.
As you're likely aware, the cinema and film industry was hit especially hard by COVID-19. To put things into perspective:
- Between 2019 and 2020, the revenue of theatrical entertainment dropped by $9.2 billion USD.
- The entertainment industry as a whole saw the lowest market revenue since 2016, dropping around $30 billion USD.
- In 2020, there were only 338 new movies released in cinema, as opposed to the usual almost 1000.
Needless to say, cinemas were the companies that should have (and did) suffer substantial blows – but Cinémas Guzzo was not among them. In fact, Guzzo's cinema chain bounced right back into 80% operation after cinemas reopened in Quebec last year.
So, what did Vincenzo do differently? Let's hear what he had to say.
Face reality, then adapt
When the pandemic hit, Vincenzo had just spent $12 million on launching a new cinema – one that was open for a meager three days before it was shut down.
"It was a cash flow draining experience," said Guzzo, "But at the end of the day, that is what I think unifies the people who are successful in a crisis period. They will live on a shoestring budget, because they know investing during the crisis is when times are cheapest to do it."
Rather than dwelling on the closure of his new cinema and the financial losses it entailed, Guzzo adapted. He looked at the new market conditions and found ways to work within them.
"It's after the pandemic that everything explodes, right? For example, we have real estate that we're no longer going to build a theater on. We're actually going to build some industrial space on it – and we know we have anywhere between 24 and 36 months to make that happen in order to take advantage of the industrial space's popularity."
During the pandemic, Guzzo used the spare time to focus on other branches of his business endeavors, such as medical and hospitality services, which he knew would be in high demand when the crisis eventually ended. He used the time to increase production and make preparations for the post-pandemic world.
So, what can we learn from Guzzo's experience?
First and foremost, it's important to face reality. When conditions change, you can't keep doing things the way you always have. You need to be willing to adapt, even if that means making tough decisions and sacrifices.
In fact, according to a recent World Bank working paper, the businesses that survived the pandemic shared some commonalities – one of which was the ability to innovate.
Those that innovated, survived
The beginning of the pandemic saw an enormous outbreak of digitization across businesses as they scrambled to find ways to keep their operations afloat. From online stores to video conferencing, companies were finding new and innovative ways to connect with customers and keep business running.
In the music industry, for example, artists took to virtual concerts in order to make money and keep their fans engaged. Small businesses learned how to sell their products through social media and online marketplaces.
Though Vincenzo's approach was a little different – he focused on expanding his businesses into new sectors – the lesson is still the same. It's always a good idea to have a plan B, and to be willing to experiment and try new things in order to stay afloat.
Think critically before you panic
It's not easy to keep your cool during a crisis, but it's important to try to think critically and rationally about your business. You may find that there's no reason to be panicking at all, which could save you a lot of stress.
For example, Vincenzo's balanced reflections on the state of his business likely saved him from throwing in the towel on his cinema venture.
"At the beginning of the pandemic, everyone thought that this was the nail in the coffin for movie theaters," Guzzo reflected. "People were going to get used to staying home, and people were going to get used to streaming.
I think they’ve got to realize that not everybody lives in a 14,000 square foot home ... and the truth of the matter is, if I work nine to five in an office, the last thing I want to do is close myself up again and stay at home."
Vincenzo maintained this informed optimism throughout the pandemic, and as he predicted, his cinemas bounced right back to success after lockdowns were lifted.
Now, this isn't to say that keeping your chin up and being the optimist will always save your business. What you need to do is look at your specific situation and make an informed decision without resorting to hysterics or giving up before the race has begun.
"The go-back to the theaters wasn't as strong, which worried a lot of bankers and people in the industry. But in reality, it was just a question of analyzing what was going on properly,” Guzzo said.
Put your time to good use
Vincenzo’s final insight before we moved onto other topics was the idea of using the time you have in order to make the most of a rough situation.
When his new cinema shut down just days after opening, Guzzo began to think: what should I turn my attention to, now that the cinema is out of action?
As a result, Guzzo ended up developing other business endeavors and ticking off goals that he hadn’t previously had time to focus on.
“All of a sudden, the movie theater wasn't taking 24 hours of our time, so we took a chance on buying real estate that was retail based and entertainment based,” he said.
The new direction you take as a business person could be relating to your business itself, or it could be that you take a new career direction altogether. The important thing is not to dwell on what’s happening, and focus on what you can make happen.
Companies that used their time well: Moriarty’s Gem Art
Straying from Vincenzo’s story for a moment, let’s take a look at Moriarty’s Gem Art – a thriving jewelry store in Indiana. When the pandemic struck, owners Steve and Nancy Moriarty knew that sales would be tough from thereon in.
But the company didn’t waste any time. Almost immediately, they pivoted into a new market space and began producing something new – YouTube livestreams.
Rather than relying on jewelry sales alone (or worse yet, giving up entirely), they decided to run weekly streams in which the Moriarty family featured special stones from their vast collection.
And, what do you know – this simple pivot did the trick. With the extra publicity, Moriarty’s Gem Art began making thousands of dollars in sales. One show even fetched a whopping $20,000 sale in the thick of the pandemic.
Giving up is an option, and bankruptcy is an option. Sometimes one or both of these are called for, especially if you need to be focusing on family issues or other struggles. However, you should always be looking to pivot rather than drop away altogether; sometimes, all it takes is a slight change in your operations in order to deal with crises that arise.
Other tips for crises-proofing your business
That was all we heard from Guzzo on the issue of maintaining and developing a business through times of crises – but there are still more strategies to discuss which may help you to stay afloat during the next recession. Here are three take-home tips to think about:
1. Prioritize and maintain your customer base
In times of upheaval, it can be difficult to keep track of your responsibilities – but it’s crucial that you stay in touch with your clients and continue to serve them as best you can.
You can do this by:
- Staying in communication via regular email and social media updates
- Offering sincere apologies for any services or products that cannot be fulfilled during the turbulent period
- Coming up with alternative ways of serving your client base (where possible)
- Running loyalty programs that remind your customers they are valued, even in times of crisis
The majority of your revenue comes from just 20% of your clients – your committed customers who trust the product or service you provide. Keep these clients on your side, and you’ll have a solid base to return to when the crisis is averted.
2. Reduce unnecessary expenses and cut down where you can
It’s fair to say that money is the primary concern when crises strike your business, which is why cutting costs where possible might just save your hide.
Now is the time to lay out your budgets and cut down on anything you can do without. For example:
- Can you halt team training for the time being?
- Do you need to pay for software subscriptions and other business-related services while your business is out of action, or can you put those payments on hold until the crisis is over?
- Are you able to pause your regular stationery and supplies deliveries until operations resume?
You’re bound to find plenty of areas in which to cut costs – just until things get back up and running, and then all systems are go!
3. Communicate with your team members
This is arguably one of the most critical steps you can take in weathering a financial storm. When things go wrong, it’s hard enough to navigate the rough waters without losing your communication lines.
You can maintain your open communication by:
- Having a scheduled progress meeting each week or half-week to discuss any developments or updates
- Sending out regular messages as soon as anything changes, and being totally transparent about the good, the bad, and the downright ugly
- Letting your employees or colleagues know that you are there to support them, and that they aren’t facing anything alone
Make sure that your entire team knows what’s going on at all times. There’s no point hiding the facts – you’re in this together, and with transparency, you can support one another until you are out the other side.
Final thoughts on staying afloat amid crises
No one prepared us for the havoc that 2019 through 2022 would wreak, and the struggle is by no means over for businesses. The entertainment industry is still scrabbling to regain its footing, small businesses are starting over from scratch, and the tourism industry will be nursing its wounds for some time.
That being said, this is a necessary conversation to have – not just for businesses struggling through COVID-19, but also for any crises that may arise in the future. How are we going to handle another recession of the same scale, or worse?
Thankfully, people like Vincenzo Guzzo are inspiring us to take a resilient and optimistic approach in situations where the worst might be expected. With Guzzo’s insights and the extra tips we’ve talked about today, you’ll be in a far better position to weather the storm and come out relatively unscathed.
Have you thought about your crisis reaction plan? What steps are you taking to ensure that your business stays afloat (if the need arises)?
I sincerely hope this has been helpful to those who need it, and to those who may need it in the future. And, if you’re interested in hearing more about Vincenzo’s mega success story, don’t forget to head over to my YouTube channel for the inside scoop on Cinemas Guzzo.
💻 Tool Of The Week: Pump Content
This week I found an awesome tool for all content creators (which should be all of you!), so I hope you’ll enjoy. Pump Content allows you to start/stop recording videos by clapping your hands twice (so you no longer have to constantly go back and forth from your phone), and the claps are automatically cropped out for you!
Super simple, works awesome, saves you tons of walking back and forth to your camera when you’re trying to solo record. This would be huge for any fitness influencers but also people that want to do multiple takes of talking head videos or pause and get your thoughts composed without going back and forth to your phone.
Vincenzo Guzzo is a Canadian entrepreneur, philanthropist and television personality. He currently serves as CEO of Cinémas Guzzo, Groupe Guzzo Construction inc., Guzzo Medical and Guzzo Hospitality. He has also opened a chain of Neapolitan pizzerias called Giulietta in Montreal.
He and his wife raise money for charities through the Guzzo Family Foundation. Guzzo was a recipient of the Queen Elizabeth II Diamond Jubilee Medal in 2012, he was knighted by the Order of Merit of the Italian Republic and is a member of the Order of Malta. In 2018 Guzzo joined the cast of the CBC Television business reality show Dragons' Den as one of the investor "Dragons" in season 13 and season 14.
Here’s what we spoke about on the last episode of the Success Story Podcast…
- Building A Cinema Empire.
- The Evolution Of Movie Theatres.
- The Mindset Required To Start A Business.
- What Does Vincenzo Guzzo Look For In Entrepreneurs?
- Best Marketing Advice For Early Stage Startups.
📚 Things You Should Read: The Prince
The Prince is a 16th-century political treatise written by Italian diplomat and political theorist Niccolò Machiavelli as an instruction guide for new princes and royals. This was the book Vincenzo Guzzo mentioned everyone should read in the podcast.
This is not a nice book, or a book that will teach you how to be a better person, but it is a classic and an incredibly interesting look into the minds of rulers. Although it was written 500 years ago, there’s an argument to be had regarding whether or not some of the learnings are still relevant today.
The general theme of The Prince is of accepting that the aims of princes – such as glory and survival – can justify the use of immoral means to achieve those ends.
Although I think most of our moral composes make us opposed to the simple wickedness discussed in the book regarding power, influence and persuasion it would be ignorant to not read the classic and understand that there are people, in this world whose moda operandi is probably not too far from some of the ideas discussed in the book.
💡 Other Thoughts
1. On Money
What you do with the money that you earn says more about you as a person than what you do to earn it.
2. On Work
If you do work that you're proud of, everything else seems to fall into place.
3. On Inspiration
Why look out for inspiration, when it is right inside you?
Your experiences, your choices and your life is the greatest teacher you can ever have.
4. On Energy
Stop managing your time. Start managing your energy.
Success Story Podcast
If you enjoyed the content in this newsletter, you’ll love my podcast where I draw out insights from incredible individuals and tell the stories of some of the worlds most prolific thinkers and doers.
If you enjoyed the newsletter, please share it with a friend who’d find it useful.
Thank you for reading,